Question

- May I get a 5 paragraph essay including introduction, body paragraphs and conclusions on “How to be financial Stable?

Answer 1

Financial stability means that volatility in terms of regular income doesn't affect your financial life. Financial stability decreases financial imbalances due to adverse circumstances in the market.

The 2 key mantras to financial stability:
1. Savings and assets allocation.
2. Only doing the necessary expenditure.

Savings and asset allocation:

He needs to be an intelligent Investor.
Even if the investor invests in the passive fund like Index fund(S&P500) on an average, depending upon the past trend, he can earn a handsome return. Although it's not a guarantee but there is a certain level of confidence. The Investor can diversify his portfolio in different Index funds, Real estates and Gold. So that the risk decreases. 60%-70% of the money should be invested in equity.
Remaining amount should be invested diversified portfolio for example Bond, real estate fund or Gold. Whichever is performing well at the time and depending upon the circumstances - like if positive sentiments are prevailing in the markets & about economy it's best to invest in Equity or if the future of the economy is in doubt it's better to invest in commodities like Gold, which provides a good hedge to the overall portfolio. Medical Insurance and Life Insurance should be done. They are a great form of Investment.

2. Expenditure:
He needs to do a cost-benefit analysis before spending his money.
A person needs to keep a check on impulse spending.
He needs to avoid debt and take it only when it's beneficial and has the capacity to pay for it today.

Conclusion:
A man can become financial stable only when he has a financial mind. A financial mind understands the magic of compounding and has the capacity to handle a large sum of money.
Financial stability doesn't mean being debt-free and avoids taking loans rather it means having the capacity to repay them back even in the worst circumstances. The money is a man's great friend- if he saves it, it will save him.